Correlation Between Fidelity National and G2D Investments
Can any of the company-specific risk be diversified away by investing in both Fidelity National and G2D Investments at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Fidelity National and G2D Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and G2D Investments, you can compare the effects of market volatilities on Fidelity National and G2D Investments and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Fidelity National with a short position of G2D Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and G2D Investments.
Diversification Opportunities for Fidelity National and G2D Investments
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fidelity and G2D is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and G2D Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G2D Investments and Fidelity National is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Fidelity National Information are associated (or correlated) with G2D Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G2D Investments has no effect on the direction of Fidelity National i.e., Fidelity National and G2D Investments go up and down completely randomly.
Pair Corralation between Fidelity National and G2D Investments
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the G2D Investments. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 1.82 times less risky than G2D Investments. The stock trades about -0.33 of its potential returns per unit of risk. The G2D Investments is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 219.00 in G2D Investments on August 27, 2024 and sell it today you would earn a total of 4.00 from holding G2D Investments or generate 1.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. G2D Investments
Performance |
| Timeline |
| Fidelity National |
| G2D Investments |
Fidelity National and G2D Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and G2D Investments
The main advantage of trading using opposite Fidelity National and G2D Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, G2D Investments can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in G2D Investments will offset losses from the drop in G2D Investments' long position.| Fidelity National vs. Fras le SA | Fidelity National vs. Clave Indices De | Fidelity National vs. BTG Pactual Logstica | Fidelity National vs. Telefonaktiebolaget LM Ericsson |
| G2D Investments vs. Fras le SA | G2D Investments vs. Clave Indices De | G2D Investments vs. BTG Pactual Logstica | G2D Investments vs. Telefonaktiebolaget LM Ericsson |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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